WHAT WOULD APPLE BE SMOKING? (That image to the left applies only if they'd actually do what is described below.)
See also, UPDATE to include online zines that noted the stress on subscriptions today
As I write this blog article, I see that AppleInsider is quoting ONLY Apple's wording to publishers of *SUBSCRIPTION* apps and so far I see nothing new, especially anything saying the 30% wording applies to non-subscription legacy apps such as e-reader apps. At the time I wrote on Feb 1 and Feb 4, Sony had not detailed yet what the billing plans they submitted actually were.
30% of a bookseller's transaction would be 100% of bookseller's take via Apple's Agency Plan, and the e-reader-app bookseller would get nothing. That makes no sense.
Would Apple want to guarantee that those interested in reading e-books on a portable device will not choose the iPad for that? Would they be trying to help Amazon, Barnes & Noble, and Android tablet makers sell their devices?
Why would I buy an iPad 2 when I know that Android tablet makers will not be charging e-reader vendors 30% of a sale when that is ALL the vendors and e-book sellers will be getting before an Apple fee, thanks to Apple's encouragement of the Agency Plan now used by the Big5 and responsible for raising e-book prices by about 50%?
In other words, as I said, the online booksellers make 30% on a sale, and Apple would want 100% of that. That's not possible. AppleInsider's Slash Lane writes that "Legacy apps must comply with Apple's App Store subscription rules by June 30" -- that's the headline. And the interpretation is:
' Software currently available in the iOS App Store that does not comply with Apple's newly enforced in-app subscription rules, such as the Amazon Kindle or Hulu+ applications, have until June 30 to comply or they could be removed. '
As I wrote February 4, Apple sent the following to
subscription publishers and there was concern the policy would be extended to online-bookstore e-book reader apps:
' "For existing apps already in the App Store, we are providing a grace period to bring your app into compliance with this guideline," the letter to publishers from Apple reads. "To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011." '
So, that is old news. Apple Insider also uses the Digital Daily's interpretation:
' That means applications like Amazon Kindle, Hulu+, and Netflix now have less than four months to add an in-app purchasing option to their App Store software. And for those content providers, Apple will take a 30 percent cut of all sales made within the application. '
Apple Insider and Digital Daily are applying subscription "30%" rules made for subscription publishers to non-subscription e-book seller apps As I said before, I think most might understand attempting to dun Sony/BN/Amazon 5% for space in a highly-traffic'd area for one's sales-stand, and even that might be questionable to online booksellers where book-sales margins (expenses etc) are small.
Such a move would probably hurt Apple in many ways. Would Apple allow books sold through their device to be priced higher to take care of that 5% or 30%?
30% (100% of e-book profit) would ensure that all e-reader apps would leave the Apple store. Maybe Apple wants that? That's pretty doubtful.
Would loyal Apple users pay the premium just to get an e-book on the iPad? Would the booksellers get customer data from sales?
At any rate, there's little doubt that Steve Jobs's Apple would try to get all that it could, but 30% of e-bookseller transaction (100% of seller-profit) would be just irrational.
We'll see. The main question from today's articles would be, "Is Apple Suicidal?" because that's what they'd be, but I think that the percentage-rules cited for subscription-publishers in early Feb are being applied by the article writers to non-subscription e-booksellers.
Again, might Apple enforce an in-app iBookstore fee for other-vendor e-books? Sure. But not 100% of the bookseller's take -- and the wording cited today is still from early February communications.
Most of us had already said back then that there's a concern that the Sony e-book app rejection and in-app buying option (which differs from the subscription language) will apply to Amazon, B&N, and Sony et al.
UPDATING AS I GO
STEVE JOBS from TODAY
Steve Jobs in Press Release from today (prefaced by purpose of Apple statement:
' Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store?, including magazines, newspapers, video, music, etc. This is the same innovative digital subscription billing service that Apple recently launched with News Corp.’s “The Daily” app...
...
“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO. “All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.” '
TRUDY MULLER ON SONY AS E-BOOK SELLER FEBRUARY 1In response to the Sony rejection on its
e-reader app, Trudy Muller said:
' "We have not changed our developer terms or guidelines," Apple spokesperson Trudy Muller told Ars. "We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase." '
TRUDY MULLER IN RESPONSE TODAY TO COMPUTERWORLD ON SUBSCRIPTION MODELComputerworld *
interpreted* a response from Trudy Muller today as applying to Amazon/B&N
e-book sales through their device-apps.
' Apple today unveiled the details of its App Store subscription plan, and confirmed that it will demand its usual 30% from publishers who sell content within their apps. ' [Note the word 'content' for subscription content, later interpreted as e-book content.]
...
[Computerworld goes on, below, to describe what subscription-content providers must do and then interprets it as a general requirement for Amazon's general content (the current Kindle apps don't yet do blogs or periodicals but someday may and would likely be separate apps that are subscription apps, and subscription rules would then apply to them at that time though not precisely the 30% for publishers, who are not re-sellers and who still 'earn' the other 70%).]
[Computerworld goes on to interpret the Apple statement about subscription-apps to include one-time e-book apps situation too.]
'Publishers and content sellers must remove any links within their apps to outside-the-App Store purchasing options, Apple said, a requirement that means Amazon.com must eliminate the link to the Kindle Store that it currently provides in its iPhone, iPod Touch and iPad apps.'
[Later on, Computerworld reports on Trudy Muller's response to their questions about today's press release on subscription content. ]
' Later Tuesday, Apple spokeswoman Trudy Muller confirmed that those rules apply not only to newspaper and magazine publishers, but also to content sellers like Amazon.com, which offers a Kindle app for the iPhone, iPod Touch and iPad.'
[ All emphases mine. ] '
The concern today has to do with interpreting "
content sellers" to mean
e-book content sellers as well as "subscription-content sellers" in connection with a press release focused on subscription-apps.
Now, Apple's Trudy Muller may have meant e-book apps too, but she answered in the context of the subscription-content press release. If she does mean Amazon and B&N e-books also, it contradicts what she said about the Sony e-reader app two weeks ago and it means that the e-reader apps will leave Apple or charge 143% on top of the book price (if Apple allows) and no one would use Apple's iBookstore for these other vendors' e-books unless they were iPad loyalists in the extreme, willing to cover Apple's added fee for the books.
UPDATE - 5:40 PM same day (Original post 2/15/11, 2:41 PM)
Mashable's Christina Warren does draw attention to the fact that the focus of today's announcement was on subscriptions. Here is her take on that aspect:
' Earlier this month, the Sony Reader app for iOS was reportedly not accepted into the App Store because it violated some of Apple’s policies. At the time, it was unclear if the cited policy violations would extend to other e-book applications like those from Amazon and Barnes & Noble. Because Apple’s latest remarks concentrate on subscription content, it still isn’t clear to us if these new provisions also apply to other types of apps. We don’t know if this means that applications — like Amazon’s Kindle app that sell purchases a la carte — must now remove links to outside web stores.
The Kindle app for iOS received an update Monday and, for the record, the link to the Amazon Kindle website is still in the app. '
UPDATE2 - Here's another way to look at some differences that must be taken into consideration for any vending-stand fee coming down the pike.
30% of an EBOOK SELLER's transaction is 100% of the seller's take/
30% of a PUBLISHER's transaction is 30% of the publisher's take.
Also, read Mike Perry's thoughtful analysis in two parts in the comments area
UPDATE3 - Here's The Telegraph (UK) on Subscription vs "One-Off"
Shane Richmond, Head of Technology for Telegraph Media Group, writes today:
' ...That has led to speculation about what this will mean for an app such as Amazon’s Kindle app, which provides a link to purchase from Amazon’s website. It may be that Apple intends to force ebook retailers to offer ebooks for sale within their apps and take 30 per cent of thosee sale. That would force ebook retailers to raise their prices or lose money. Maybe that’s what will happen. However, that’s not what Apple has announced today. This is about subscription not sales of one-off products. If you’re a publisher and you want to allow people to subscribe to your publication then you must offer the same subscription price within your app as you offer on your website and Apple will take 30 per cent of the in-app subscriptions. '
Kindle 3's (UK: Kindle 3's), DX Graphite
Check often: Temporarily-free late-listed non-classics or recently published ones
Guide to finding Free Kindle books and Sources. Top 100 free bestsellers.
UK-Only: recently published non-classics, bestsellers, or highest-rated ones
Also, UK customers should see the UK store's Top 100 free bestsellers.
View the original article here
Ever since Amazon(NASDAQ:AMZN) released their 2010 4th Quarter Financial Report on Thursday, I’ve been seeing a lot of speculation on the profitability of the Kindle eReader itself. Mainly, I think, owing to the language of the report itself, which is definitely open to closer examination.